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The dominant classes in the UK are moving ever leftward.

Meanwhile, everyone else is centrist or decidedly conservative. We’ve noticed our standards of living slip. This probably would have happened without the pandemic, only more slowly.

On Wednesday, November 17, 2021, The Telegraph‘s Allister Heath had a good column on what’s happening: ‘Catastrophic elite failure is destroying the economic foundations of the West’.

Heath blames monetary policies for capitalism’s current weakness in the West (emphases mine):

In Britain and abroad, years of monetary vandalism, fuelled by hubris, neglect, economic amnesia and incompetent short-termism, are destroying capitalism’s ability to function efficiently and equitably. An obsession with near-zero interest rates and QE is engineering a vicious redistribution, propping up washed-out politicians and empowering a zombie class of unproductive private-sector bureaucrats.

He then goes on to discuss what is happening in the UK:

Savers are being mugged: over the past year, at least 4.2 per cent, and perhaps even 6 per cent, of the value of bank accounts was stealthily confiscated by resurgent inflation, and the average worker is being subjected to a real terms pay cut. For all of the talk of “levelling up”, and the genuine rise in relative wages in some sectors such as lorry driving, tens of millions of workers are witnessing, to their growing fury, the salami-slicing of their purchasing power, even before the National Insurance rise.

Heath says that the overall problem is:

the shared self-interest of our politico-technocratic ruling class …

… which has led to:

a series of catastrophic, self-reinforcing consequences.

It is true that the rich get richer. The middle and working classes have less purchasing power. It used to be that most Britons could buy their own homes. Not any more.

Heath points out that this is not just an economic problem but also a social one, affecting the family structure:

Cheap and easy money is destroying conservatism and liberalism, and shifting Britain to the Left politically, morally and culturally. On the one hand, work has become less rewarding; on the other, ultra-low mortgages and QE have dramatically enriched the 65 per cent of the population who possess their own home these past couple of decades, while the 35 per cent who don’t have fallen far behind. Owners of certain financial assets have also done very well from cheap credit, as have those with index-linked pensions; other savers are being hammered. Creditors are losing, debtors are winning.

This isn’t genuine, free-market capitalism: it is a warped, corrupting ersatz that is destroying the social compact. It undermines family formation. It sends a debilitating signal that the only way to become rich is to be rich in the first place, that thrift and hard work are a waste of time, that delayed gratification is for fools, that debt-financed hedonism is the answer. It will also fuel a disastrous class warfare, and embolden the hard Left to call for mansion taxes, all-out wealth levies, higher minimum wages and enhanced trade union powers, destroying what is left of the economy.

Quantitative easing (QE) — cheap money — was once considered an imprudent policy. It was never conservative, but now, it has become the norm:

People’s QE, which started as a fringe hard-Left idea, is mainstream; many “experts” now argue that we should increase our “excessively low” national debt by at least 50 per cent.

Heath goes to say that ‘woke corporations’ are another result of QE:

Cheap money is even behind the rise of the woke corporation, including the emergence of an unproductive yet highly paid segment of the middle class devoted to virtue-signalling. Inflation, by damaging risk-free savings such as cash and gilts, has encouraged riskier investment in stocks and shares, helping big fund managers, especially those that operate tracker funds, to tighten their grip. Because these funds don’t seek to beat the market, they have embraced an alternative role as woke enforcers, forcing private firms to sign up to endless green and social targets.

He says that governments must stop relying on QE and they must rein in spending:

We need to wean ourselves from QE. Governments must rein in spending. It’s either that, or wait until what is left of our societies is eventually taken down by the greatest financial reckoning in history.

That is one of the most honest appraisals of our economic and social situation I’ve ever read.

It’s time for more financial commentators to tell us the raw truth.


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